South Indian Banks Report Strong Credit Growth Outpacing Deposits
Update from five south-based banks: All report higher credit growth than deposit growth
The Economic Times
Image: The Economic Times
Five south-based banks, including Indian Bank and South Indian Bank, reported higher credit growth than deposit growth as of March. Indian Bank's gross advances rose 13.6% to ₹6.68 lakh crore, while deposits increased 12.6% to ₹14.98 lakh crore. This trend reflects a broader industry pattern.
- 01Indian Bank's gross advances grew by 13.6% year-on-year.
- 02South Indian Bank reported a 15.66% increase in gross advances.
- 03Karur Vysya Bank's advances rose by 16.87%.
- 04Tamilnad Mercantile Bank achieved the highest growth in advances at 20.32%.
- 05Karnataka Bank's advances grew by a modest 6.9%.
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As of March, five south-based banks reported that their credit growth outpaced deposit growth, aligning with industry trends. Indian Bank, headquartered in Chennai, recorded a 13.6% increase in gross advances, reaching ₹6.68 lakh crore. Its deposits rose 12.6% to ₹14.98 lakh crore. The growth in advances was primarily driven by lending to the retail, agriculture, and micro, small, and medium enterprises (MSME) sectors, collectively known as the RAM sector, which saw a 15.7% growth to ₹4.06 lakh crore. The bank's current and savings account (CASA) ratio improved to 39.86%, up from 39.08% in the previous quarter. Other banks also reported significant growth: South Indian Bank's advances increased by 15.66% to ₹1.01 lakh crore, while Karur Vysya Bank's advances grew 16.87% to ₹97,052 crore. Tamilnad Mercantile Bank led with a 20.32% rise in advances to ₹53,380 crore. In contrast, Karnataka Bank's advances only grew by 6.9% to ₹83,337 crore.
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The strong credit growth indicates increased lending activity, which can support economic growth and provide more financial options for consumers and businesses.
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